CITY OF BERKELEY BUDGET RESTORES PROGRAMS Tough decisions of previous years allows some programs to rebuild, but the City Manager warns of fast-growing costs and uncertain revenue in the future

Berkeley, California (Tuesday, May 08, 2007) - Berkeley residents will see an overall increase in City services in the proposed biennial budget for Fiscal Years 2008 and 2009, submitted to the City Council Tuesday night.

“The City Council made difficult decisions on the last several budgets,” said City Manager Phil Kamlarz. “Because of their foresight and some one-time revenue, we will be able to restore certain services this year. There are still some cuts, but for the most part, there are few cost increases to property owners and only small reductions to some frontline services. In addition, we won’t need to rotate the closure of fire companies through the end of 2008.”

Over the past four years, the City was forced to reduce General Fund expenditures by almost $20 million and reduce the City’s workforce by 120 full time employees (6.8 percent). Some areas, such as parks, facility maintenance, and youth and recreation programs, had big cuts, and many of those programs will be restored.

General Fund Summary

The City’s net budget for FY 2008 and 2009 is about $614 million, of which $282.5 million (45 percent) is the General Fund, which where the City Council has the most spending discretion. The other 55 percent is money that comes to the City that must be spent on specific services (for example, federal grants for emergency response and preparedness, or garbage and sewer fees pay for that specific service).

Program Change Highlights

There are General Fund reductions of approximately $2 million over the next two years, but this budget also shifts resources to a number of programs that the Council has made a priority. For example:

Social programs: The proposed budget keeps funding for social programs even overall, and increases funding for homeless programs by 7 percent.

Recreation and youth programs: Recreation and job programs are increased by $306,000 over the next two years, rebuilding programs that were dramatically reduced in prior years. Recreation programs that serve teens and disabled youth will get an additional $170,000 in the proposed budget and there will be 50 additional summer youth jobs available with an annual increase of $136,000.

Public safety: Public safety is the largest segment of the City’s General Fund budget and is growing at a rate that is much faster than the City’s revenue. In future fiscal years, Berkeley residents may have to consider a public safety ballot measure. In the meantime, $900,000 will be spent on one-time expenditures this year. Of that total, $600,000 will be spent to end the rotating closures of Berkeley’s fire stations through December 2008, and $300,000 will be spent on training for the new Public Safety System that will improve communications center operations, and crime reduction efforts.

Affordable housing: Berkeley’s store of affordable housing is getting a $2.45 million boost. Projects such as the Oxford/Brower Center, Satellite Senior Housing and the Ashby Lofts will receive added one-time project funding from the General Fund, which will ultimately be reimbursed by condominium conversion and inclusionary in-lieu fees.

City infrastructure: Repairing the City’s infrastructure has been a priority these past three years. Much of the City’s one-time revenue has gone toward improvement projects such as streets, roads, clean storm water, and street lighting. The proposed plan now allows the City to spend $41.9 million on infrastructure improvements, which is $11.5 million more than the previous plan allocated.

Revenue Forecast

During the past several years, many of the City’s revenue sources have been flat or have declined when adjusted for inflation. At the same time, the cost of City services and programs has steadily increased. Property taxes are the only source of revenue that has grown faster than expected, so a decline in the real estate market will directly hurt City services and operations.

Public involvement

The public plays an important part in the budget-writing process. The City Council has two public hearings about the budget. The council will take up the budget several times in the next two months. All Council meetings will be held in Council chambers.

May 22, 7 p.m.: Public Hearing #1 on Budget and Fees

May 29, 7 p.m.: Community Meeting at the North Berkeley Senior Center

June 12, 5 p.m.: Workshop

June 19, 7 p.m.: Public Hearing #2 on Budget and Fees

June 26, 7 p.m.: Adopt Budget and Tax Rates, 7:00 p.m.

In addition to the City Council’s budget process, a community meeting will be held May 29 to give community members an opportunity to learn about the budget in a less formal setting. They will hear a presentation about the budget from City Manager Phil Kamlarz and Budget Manager Tracy Vesely and can participate in a question and answer session. Residents are encouraged to then testify at a public hearing or write or call their Councilmember.

The public can also learn more about the budget by visiting the City’s website at www.CityofBerkeley.info/budget. Visitors to the site will find the entire proposed budget, a budget calendar, a glossary and an easy-to-understand description of the budget and the budget process. The budget can also be purchased for its printing price of $25. Please call Tracy Vesely at 510-981-7000 for more information.